How Much the Average 45-Year-Old Canadian Has in Their TFSA and RRSP

In an ideal financial scenario, a 45-year-old Canadian is in the middle of their career. You start working full-time at age 25 after your higher education and retire at age 65. Having gained 20 years of experience, 45 is when you are closer to your peak earnings. You probably have repaid the student loan, purchased a house, and started a family. In this ideal world, the average Registered Retirement Savings Plan (RRSP) value for Canadians aged 45–54 is $173,500, and the average Tax-Free Savings Plan (TFSA) value is $40,500, as per 2023 tax year data for Statistics Canada.

The wide gap in TFSA and RRSP balances

The average RRSP is way higher than the average TFSA because the contribution room of RRSPs depends on your income. It is 18% of your average annual income or maximum threshold ($35,390 for 2026), whichever is lower. This limit grows every year, while the TFSA contribution limit grows once every four years or as the Canada Revenue Agency (CRA) determines.

Hence, it comes as no surprise that the average RRSP balance is more than four times the average TFSA balance.

Using the average TFSA and RRSP as the benchmark

Is it fair to use the average balance as a benchmark, considering that finance is personal? Not everyone lives according to typical timelines. What may be ideal for one person may not be ideal for another. One can view average as motivation or a bottom line, below which you do not want your RRSP and TFSA balances to go.

The ideal TFSA and RRSP balance depends on your individual financial circumstances and objectives. The TFSA is an ideal instrument to build wealth, park emergency funds, and generate tax-free passive income. The RRSP is an ideal instrument to build passive income for years of lower active income, as withdrawals are taxable.

How to use an RRSP tax-efficiently

Let’s consider a scenario. Janet is in her mid-40s and earns $150,000 annually. She will be paying 26% tax on $33,000, which comes to $8,580. Instead, she invests $33,000 in an RRSP and saves $8,580 on her tax bill. She quits her job to start her own venture at age 50. In that year, she can use the RRSP balance to pay for her daily expenses as she falls in the lower tax bracket. Now, 50 is not the age at which she is getting the Canada Pension Plan or Old Age Security. The financial institution will deduct withholding tax from her RRSP withdrawals, but she can claim refunds for the excess deductions.

The RRSPs’ main intent is to serve you during retirement, but it also gives you the freedom to choose when you want to retire. If withdrawals are taxable, why not a normal investment account? Because RRSPs allow your money to grow tax-free, which means no dividend tax and no capital gain tax, even for US stocks. Canadians can earn tax-free US dividends by submitting Form W-8BEN to claim the benefit under the US-Canada tax treaty.

Note: This US dividend tax exemption is not available in a TFSA.

If you plan to retire early like Janet, consider maxing out your RRSP and using tax savings to contribute to a TFSA. If you are 45 and want to retire at 50, now may be a good time to start building a passive income pool with dividend growth stocks like Canadian Natural Resources (TSX: CNQ) and Manulife Financial.

Stocks for passive income

Canadian Natural Resources has a 25-year history of growing dividends in the range of 2%–50%. Its dividend growth slowed as the company diverted capital to buy new oil sands reserves. Its focus is now on accelerated deleveraging to reduce debt to US$13 billion from US$17.4 billion as of March 31, 2026. The savings on debt interest will reduce its cost per barrel and increase free cash flow available for dividends and share buybacks. It takes into consideration the dividend amount when calculating the cost per barrel.

The company has navigated sharp volatility in oil and gas prices and volumes, without affecting its dividend payments. This shows the company’s financial resilience, making it a good RRSP stock.